The rise in unemployment since May 1979 is a consequence of many factors, notably past high rates of inflation, excessive wage increases in 1979–80, the slowness of wage settlements to adjust to lower rates of inflation and the severely depressed state of the world economy.

It has never been the practice of this, or any previous Government, to publish unemployment forecasts. Prospects for a fall in unemployment will be brighter the sooner the competitiveness of British industry is improved.

A lasting increase in employment depends on achieving lower inflation through the pursuit of balanced fiscal and monetary policies and on securing improvements in our external competitiveness. Progress has been made on both of these fronts, but more is needed. It is essential to continue the fight against inflation and242W
achieve a further moderation in wage settlements during the new pay round. The Government are also concerned both to alleviate unemployment amongst especially vulnerable groups and to improve labour market efficiency. Spending on special employment schemes has been increased substantially.